MOA hotel plan takes shape

The Mall of America is looking to add a new hotel and retail space to the mall in Bloomington. Future plans call for new office space (right) on top of the three floors of new retail space. (Submitted rendering: DLR Group)

“They’re at the table now,” said Schane Rudlang, administrator for the Bloomington Port Authority of the Shakopee Mdewakanton Sioux. “They are an investor.”

Rudlang said that the tribe, which owns and operates the Mystic Lake Casino Hotel and other enterprises, would create an LLC that would own the hotel, currently slated to have somewhere between 320 and 340 rooms. He noted that project elements and the overall budget have continued to fluctuate during the planning process.

Rudlang noted that there are legal issues to be sorted out: “The LLC will be under the jurisdiction of the United States and not sovereign land,” he said.

“Mall of America is exploring a partnership opportunity with the Shakopee Mdewakanton Sioux Community and Mortenson Development to construct a new luxury hotel on the north side of the property as part of the Mall’s latest expansion project. The Mall has talked with a number of potential investment partners and reached out to SMSC as part of that process,” said Dan Jasper, a spokesman for the Mall of America, in an email to Finance & Commerce.

Jasper declined to identify the brand of the new hotel. He said the current plans call for 160,000 square feet of retail space as part of the project. No tenants have been identified yet for the new retail space.

Rudlang said that the current project budget calls for $116 million for the retail space, $106 million for the hotel and $30 million for new underground parking. The Bloomington Port Authority would pay for the 550-space parking ramp, which the authority would own, through tax increment financing generated by the project.

The Mall of America is owned by Edmonton, Alberta-based Triple Five Worldwide. The long-range plan also calls for adding office space on the northern side of the mall, but that part of the project won’t move ahead until tenants are secured.

Cameron Snyder, a spokesman for Mortenson Development, referred questions about the project to the Mall of America. A spokeswoman for the Shakopee Mdewakanton Sioux Community could not be reached for comment.

The financing structure, with the city paying for parking, is similar to the deal that was structured for the recently opened Radisson Blu Mall of America. The $137.5 million, 500-room opened on the southern side of the Mall of America in mid-March.

Ted Leines, CEO of Eden Prairie-based Leines Hotel Advisors Inc., said that the question for market watchers isn’t whether the market can support more than 300 new hotel rooms at the mall, but whether the rooms will be priced at a point to make the project work.

“It’s not so much the number of rooms they add, it’s where their price point is,” Leines said. “They have to be very careful about the exact market they’re going after.”

Rudlang said that current plans call for starting construction before the end of the year.

The mall’s expansion plans are slated to be considered before the Bloomington City Council on August 5.